Diageo and Heineken swap South Africa and Namiba joint ventures

28th Jul 2015 09:35

(ShareCast News) - Diageo has agreed to sell all its stakes in joint-owned breweries in Namibia and South Africa to Heineken and take total ownership of a joint venture set up with the Dutch brewer.Diageo will receive a total net cash consideration of 2.5bn South African rand, approximately £128m from the transactions.The FTSE 100 company will sell to Heineken its 42.25% stake in the DHN beer and cider brands joint venture, plus another 25% equity stake in another JV, plus a 15% stake in Namibia Breweries Ltd (NBL).Then Diageo will acquire the remaining shares which it does not already own in Brandhouse Beverages, a beer, ready-to-drink (RTD) and spirits sales and marketing joint venture in South Africa set up in 2004 as a three-way cost sharing JV with Heineken and NBL, which will become a wholly-owned subsidiary of Diageo.Chief executive Ivan Menezes said: "We have worked very successfully with Heineken and NBL throughout our partnership, growing the beer business and establishing market leadership in spirits."From this leadership position we now believe that Diageo has the necessary scale to move to the next stage of growth for spirits, RTDs and our beer and cider portfolio in a focused, simplified ownership structure."Shares in Diageo were down 1p to 1,818.5p at 0905 BST on Tuesday.